Apple headed to US court this week over an App Store battle for monopoly abuse

Apple will head to the US Supreme Court this week to block a group of customers from suing the tech giant for monopoly abuse, media has reported.

The company is battling a group of iPhone owners who claim Apple forces them to overpay for apps by forbidding rivals to the multibillion-dollar App Store.

After the customers won the right to launch a class action lawsuit against the company in 2017, Apple is now appealing to the Supreme Court to have the decision overturned, The Telegraph reported late on 24 November.

Representational image. Reuters.

If Apple fails, the business model of the App Store, one of the company’s fastest-growing and most profitable divisions, could be threatened, it added.

Apple makes billions each year by taking a 30 percent cut of apps sold through the App Store, which are created by developers. App revenues grew by around a third in 2017 to $38.5 billion even as sales of Apple’s iPhones and iPads stalled.

The customers argue that its sizeable commission is evidence of the company exploiting its monopoly position over iPhone users. They argue that “iPhone consumers nationwide have paid (Apple) hundreds of millions of dollars more for iPhone apps than they would have paid in a competitive market”.

Apple is seeking to dismiss the case by appealing to a Supreme Court ruling made in 1977 that said only “direct purchasers” can seek damages for antitrust abuse.

The company argues that because the app developers themselves set the price of apps in the App Store and not Apple, iPhone users are purchasing the apps from the developers directly.